When government imposes a price ceiling or a price floor on a market,
a. price no longer serves as a rationing device.
b. efficiency in the market is enhanced.
c. shortages and surpluses are eliminated.
d. both buyers and sellers become better off.
a
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Economic efficiency is achieved when there is a market outcome in which the marginal benefit to consumers of the last unit produced is equal to its marginal cost of production and
A) the difference between consumer surplus and producer surplus is maximized. B) economic surplus is minimized. C) consumer surplus plus producer surplus is maximized. D) economic surplus plus consumer surplus equals producer surplus.
If a contestable market has only one seller, which of the following will keep the seller from producing inefficiently and charging a price that generates long-run economic profits?
a. government regulations b. low costs of entry into and exit from the market c. substantial economies of scale that provide a competitive advantage to large firms in such markets d. the threat of a government takeover of the firms in these markets